Old age to cost pounds 20bn a year

LONG-TERM care costs for elderly people will soar to more than pounds 20bn a year, economists will warn tomorrow. The cost of caring for the growing number of elderly people in residential and nursing homes will double in 20 years, according to the Institute of Public Policy Research's report on care for the elderly.

The study by the left-of-centre think tank comes amid mounting concern about the way care is funded. There is increasing resistance to the present system where capital assets over pounds 16,000, particularly property, have to be used to pay for care before any state help is available.

More than 5,000 elderly people have asked Age Concern in the past six months for advice on how they can legally transfer their property to children to avoid losing the family inheritance.

Last week the Independent on Sunday revealed that the family inheritance can be lost even if a property was shared by parent and child: a Somerset man is facing eviction because his home is to be used to pay for his mother's care bills.

Other elderly people also face being evicted from their residential home despite their money being used to pay for their care. One 84-year-old woman who sold her house to pay for more than pounds 20,000 of long-term care was forced to leave after her money ran out. Controversial government funding rules meant that Lilly Smith could not be helped to pay for her care until she was evicted or moved to another home voluntarily. She did not want to move; her family wanted her to stay in the home in Barnet; and, ironically, the home she has been moved to at state expense costs more.

Age Concern says at least seven other people have been evicted for the same reason and the numbers are expected to soar in the next three years. The rule penalises elderly people who went into homes before 1 April 1993, when local authorities took over the job of paying for places in residential homes from the Department of Social Security.

The pre-1993 residents get DSS rates, which are lower than the post-1993 council rates, and are also increasingly lower than the fees charged by homes. Mary Gallagher, who runs the home from which Mrs Smith was moved, said: "The legislation is appalling and immoral."